TRƯỜNG ĐẠI HỌC MỞ TP.HCM UNIVERSITÉ LIBRE DE BRUXELLES HO CHI MINH CITY OPEN UNIVERSITY SOLVAY BRUSSELS SCHOOL MBMM4 Le Quang Vinh Factors Influencing Consumers’ Behavior of Wine In Ho Chi Minh City MASTER PROJECT MASTER IN BUSINESS & MARKETING MANAGEMENT Tutor’s name: Dr. Ha Nam Khanh Giao Ho Chi Minh City (2010) Tai Lieu Chat Luong i DECLARATION I declare that this study does not incorporate without acknowledgment any material previously submitted for a degree or diploma in any university; and that to the best of knowledge it does not contain any materials previously published or written by another person except where due reference is made in the text. December 14th, 2010 Signature of the Student. Le Quang Vinh.
Master of Business and Marketing Management. ii ACKNOWNLEDGEMENT This study would not be possible without the advice, assistance, cooperation and encouragement from a number of people. I would like to acknowledge their help and support. The most important individual have been my supervisor, Professor Dr.
Ha Nam Khanh Giao. I am most indebted to Professor Dr. Khanh Giao, who showed an interest and attention in my study. His advice and generous guidance since the first term that I begun this study have been very supportive and lead me to the right track of study, and made this research possible.
Moreover, I would like to express my appreciation to Professor Dr. Nguyen Minh Kieu, who provided me the initial guidance of research method. I also would like to thank Professor Dr. Hoang Trong, who provided me valuable knowledge of business statistics and SPSS.
Dr Trong also gave me very precious comments on data processing methods and how to explain the SPSS results. Solathien company and my mentor, Mr. Nguyen Phu Hai also have my deep gratitude for providing me the market report materials and value discussions on the consumers’ choice of wine. Besides, I would like to thank Mr.
Serge Bywalski and Ms. Nguyen Thi Mong Thuy, Coordinators of the MBMM Program for their devoted supports. Phan Le Dung, Solvay Vietnam Alumni also has my deep gratitude for valuable advices. Moreover, I would like to thank Solvay Business School Vietnam and Ho Chi Minh City Open University for delivering the wonderful MBMM program.
Last, but not least, I wish to thank my family members for their love, assistance, encouragement and patience. iii TUTOR’S COMMENTS The study is a highly practical research. The research objectives were defined correctly. The structure of the study is rational.
The author used the proper research method. The findings are quite interesting with suitable scientific approach. In the result, the author pointed out that the symbolic benefits are the most important factor influencing the consumers’ behavior of wine in Ho Chi Minh City. Besides, the country of origin and grape varieties, which are being used as wine value proposition, were proved to be not significant.
Based on this finding, the author also proposed some useful suggestions for marketers of wine in the market. However, the study has some limitations, such as the survey area and sampling method; or the generalised target population … In summary, the quality of the study meets the requirements (both content and presentation) of a Marketing master thesis. I propose this study to be presented in front of the examiner board of the Solvay – OU Master of Business and Marketing Management Program. Ho Chi Minh City, December 14th, 2010 Dr.
Ha Nam Khanh Giao iv CONTENT DECLARATION. ii TUTOR’S COMMENTS. iv LIST OF FIGURES. vi LIST OF TABLES.
Rationale of the Project. Vietnam Wine Market. Aim of the Research. Consumer Behavior Models.
The Motivation to Drink Wine. Vietnamese Consumer Lifestyle. Vietnamese favor foreign brands. Spending on alcoholic drink.
Vietnamese drinking habits. DATA ANALYSIS & FINDINDS. General Descriptive Information. Research response rate.
Gender, Age and Income. Favorite communication channels and wine consuming place. Factors Influencing of Wine Consumption. EFA for all the valid scales.
Multiple regression analysis. Discriminant analysis for conceptual framework 1 and hypotheses testing. Discriminant analysis for conceptual framework 2 and hypotheses testing. Evaluation of the relationship between the factors and Average bottle consumed per month.
Evaluation of the relationship between Communication channel and Consuming place with Average bottle consumed per month. Classification of the responses of open question. Research Limitations & Future Research Suggestions. 57 Appendix 1: Survey questionnaire.
57 Appendix 2: SPSS results. 64 vi LIST OF FIGURES Figure 2.1: Sales of Wine by Subsectors - Total Volume 2004 - 2009 .2: Sales of Wine by Subsectors - Total Value 2004 - 2009. Maslow’s hierarchy of needs .2: Howarth Sheth Model .3: Engel-Blackwell-Kollat Model .5: Input, Process, Output Model .6: A purposive analysis of wine consumption.7: Why do people drink wines? .2: Detail conceptual framework .1: Gender of respondents .2: Age groups of respondents .3: Average monthly income of respondents .4: Marketing efforts - Communication channel .5: Marketing efforts - Wine consuming place .6: Adjusted conceptual framework after EFA .7: Adjust conceptual framework 1 .8: Adjusted conceptual framework 2 .9: Themes from open question. 47 vii LIST OF TABLES Table 4.1: Concept operationalization and measurement scales .1: EFA & Cronbach's Alpha for each concept / dimension .2: EFA result - Full scales .3: Multiple Regression result .4: Discriminant analysis result - Average bottle consumed per month .5: Discriminant analysis result - Average price per bottle .6: ANOVA result - Symbolic benefit factor .7: ANOVA result - Enjoyment benefit factor.8: ANOVA result - Utilitarian & Experiential benefit factor .9: Chi-Square result - Communication channel & Wine consuming place.
EXECUTIVE SUMMARY Vietnam wine market is growing fast. More and more wine producers, importers and distributors enter the market and compete against each other to bring their products to the consumers. Most of them focus on the product features (country of origin, grape varieties, taste, bottle and label). This study was conducted to find out if there are other factors affecting the consumers’ choice of wine in Ho Chi Minh City.
Firstly, a conceptual framework was built based on the Input, Process, Output consumer behavior model, a qualitative research about perceptions of wine quality (Charters, 2003) and Vietnamese drinking habits (Euromonitor, 2010). From the conceptual framework, four hypotheses about the relationships of Marketing efforts, Utilitarian benefits, Experiential benefits and Symbolic benefits with the Money spent on wine were developed. The questionnaire was built and 386 valid cases were filtered out of 450 responses. The valid responses were input to SPSS for further analysis.
Secondly, EFA was employed to remove unsuitable variables and extract the factors from the measurement scale. The result was a bit different from the original conceptual framework. The Symbolic benefit and Marketing effort factor was the same, but there were two new factors, Utilitarian & Experiential benefit and Enjoyment benefit factor. The multiple regression model was not statistically significant for finding the relationship between the factors and the Money spent on wine.
So discriminant analysis method was used to evaluating the contribution of factors to the differentiation between consumers’ group presented by average bottle consumed per month. Other analyses also were done to evaluate the relationship of communication channel and drinking place with consumers’ group. The findings from these analyses were used to provide suggestions for wine marketers in Ho Chi Minh City market. Finally, the Symbolic benefit factor turned out to be the strongest contribution to the differentiation of consumers’ group.
The importance of this factor also had a tendency to increase when people consume more wine. This is an interesting guideline for wine marketer to produce communication messages that differentiate their wines. For example, marketers can focus on symbolic values linking with wine, such as self-image, lifestyle or the importance of ritual instead of talking about the country of origin or grape varieties, which is being used by everyone. To a lesser extent, the Enjoyment and Utilitarian & Experiential factors contributed to the discrimination of consumer group as well.
However, the relationships of these two factors and the average bottle consumed per month were not statistically proven. Chapter Overview This chapter provides the project overview. It begins with the reason of this project, followed by the general background information relating to the Vietnam wine market. The key concepts of the research are also presented and, finally, this chapter concludes with the outline of this study.
Rationale of the Project Vin Attitude is a young and modern French wine producer in Côte du Rhone region, France (www. It represents 2,150 ha vineyard, 550 growers, more than 100,000 hl annually and a turnover exceeding 12 million €. The company is looking for a long – term partnership who understands the local market and has a systematically approach. Unlike other wine producers and brokers have been penetrating Vietnam market, Vin Attitude is more willing to take risk for better controlling of marketing activities by choosing a foreign based agent instead of an importer / distributor.
Solathien is a Vietnamese importer and distributor specialized in premium imported Vodka. In order to exploit the existing distribution network and enrich the product portfolio, Solathien seeks out a French wine producer who wants to enter Vietnam market. After contacting with many companies, Solathien comes to agreement with Vin Attitude to act as a foreign based agent in Vietnam market. Both companies are the newcomers to a potential but also competitive market.
In order to have proper marketing strategy, the companies should have good understanding about the consumer behavior of wine, especially in the key markets, e. Ho Chi Minh City and Hanoi. Because of the need of the companies, the project is implemented to study the consumer selection of wine in Ho Chi Minh City. Based on the findings, recommendations will be used form the marketing strategy of the company.
The findings are also served as reference for wine producers and importers who want to penetrate Vietnam market. Vietnam Wine Market In general consumption of wine in Vietnam, as well as in other Asian countries such as China or Hong Kong, is rising. Over the past two years demand for wine in Vietnam was high for many reasons. Despite the price of a bottle of wine being higher than that of a carton of beer, some more affluent consumers changed their preferences and increased consumption of wine, believing it to be good for their health.
Second, living standards have 3 improved, and high income Vietnamese like to spend a large proportion of their money in restaurants and hotels. Consequently a lot of companies aim to serve wine to these consumers, as they represent a stable consumption base. Thirdly, many people follow western lifestyles, and believe that wine illustrates their knowledge of modern lifestyles as the country increasingly integrates with the rest of the world. There are two types of wine regarding the quality in the wine environment in Vietnam.
Low quality wine is sold widely through street shops and supermarkets. High quality wine is mainly distributed through restaurants, hotels and sold at high prices to consumers with good knowledge of wine. There are varieties of price for wine in Vietnam. The key price for wine is around VND 100,000.
If old world wine has an average liter price of under VND 100,000, there is a general belief that this product is not good quality. However, consumers believe they get a better taste from new world wine if it costs at least VND 100,000. The price segmentation here is mostly driven by producers and distributors. Imported wine is still a luxury product for the average consumer, but there are various products available at different prices.
The most popular countries for wine are France and Chile, followed by Italy, Spain, Germany, Australia, New Zealand, South Africa, America, Chile and Argentina. France is considered the best choice for Vietnamese consumers, who hold French wine in very high regard.